The Secret Weapon That Will Save U.S. Entrepreneurship
January's Wells Fargo/Gallup Small Business Index survey has me more frightened than ever about America’s future.
I already knew that our GDP was stalling, if not falling. The Department of Commerce reported recently that GDP declined in the fourth quarter of last year, at an annualized rate of 0.1%. Meanwhile a minimum GDP of 2.5% is required just to tread water economically, in my view, though I think we really need GDP growth of about 4.5% to get the economy humming again.
And I already knew that unemployment was stuck at right around 8%; when you add in those who are “underemployed,” according to Gallup data, it jumps to 17%. These figures tell the story of what was a prosperous and stable democracy that’s now going nowhere.
But the Wells Fargo/Gallup Small Business Index survey reveals the biggest nightmare metric of all: 30% of small-business owners are worried they may not be in business in 12 months. I am also worried because new business startups have fallen below 400,000 per year, and the country needs a bare minimum of 1 million new startups annually, in my estimate, to keep the economy running. We cannot, on top of this, have existing companies going out of business.
These findings are so alarming because the total number of U.S. employees within small businesses is significantly larger than in big business. The fact is, new business startups mean everything to America, because without them, our GDP cannot grow and unemployment will continue to rise. The miracle of economic life in the United States begins with one business starting up -- that moment of conception, if you will.